General Motors to Sell Entry-Level Opel Models in Europe

As part of its plan to revive the Opel brand in Europe, General Motors may soon start selling entry- level models. This decision comes after the Detroit-based automaker failed to move the brand up-market.

GM’s original strategy was to promote Opel as the pricier alternative to its Chevrolet brand in Europe. This was the plan as recently as 2013. The carmaker eventually changed plans, and in December, it pulled out Chevrolet as a commercial brand. Now, it is expected to sell entry-level Opel models in the region.

In an interview at the Geneva Motor Show, GM President and Opel Chairman Dan Ammann spoke of making the Opel brand more in tune with the demands of buyers. He said, “If we see a customer need we are able to meet within the bandwidth of the Opel brand in a particular segment, we will move on it.” Ammann continued, “We’re prepared to respond to where the market wants us to go.”

Opel’s newly minted marketing chief in the region Tina Mueller admitted that the brand felt the need to sell less expensive vehicles, mostly because the cars are not as affordable for younger buyers. Currently, the brand’s most affordable model is the Adam city car, whose selling price is between €12,000 and €16,000 (or $16,000-$22,000). Mueller mentioned that the company had identified a need to offer cars for a price less than €10,000 ($14,000).

Opel is expected to stay at the low end of the auto market for a while. The brand will not be going against BMW, Audi and Mercedes-Benz, as it will not be venturing into the luxury segment anytime soon.

Mueller, who previously worked for Henkel, said that Opel will become a ‘democratic brand.’ She said that the focus will be on their core segments (small, midsize and compact autos) for now to revive the brand and that it is too early for them to support buyers of BMW.

Opel used to be a popular auto brand in Europe, with Volkswagen as its main competitor. The brand eventually struggled due to years of financial difficulties, allowing VW to dominate the European markets. WardsAuto data reveal that while VW had 2.1 million deliveries in 2013, Opel only sold 738,411 vehicles.

GM seeks to boost the sales of Opel (as well as sister company Vauxhall) with a €4 billion ($5.2 billion) investment over the span of three years. The money will go toward the production of 23 new products and 13 new powertrains.

Ammann reported to journalists at Geneva that the brand have already enjoyed some progress, as proven by its higher market-share gain. According to him, the Opel Adam and Mokka small CUV contributed to the 5.61 percent growth in 2013. In 2012, the brand reported a market-share of 5.59 percent. The gain is the first for the brand in 14 years.

Opel showcased new cars at the auto show, including a new Adam S and the Opel Astra OPC Extreme, a compact car powered by a 1.6L CDTI diesel engine. The brand will introduce OnStar connectivity in the region in 2015.